Market Deep Dive Report Longevity Therapeutics June 2020 Contents 1. Summary 3 2. Market Overview 3 2.1 Pitchbook Statistics 4 3. Technology Overview 5 3.1 The Biology of Aging 5 3.2 Current Approaches 6 3.3 Late stage privates & publics 8 5. Historical Context, Key Trends, & Future Development 9 5.1 History 9 5.2 Present day status 9 5.3 Top People and Labs 10 5.4 Top VCs and Funding Sources: 10 5.5 Future Predictions 11 6. Opportunities 11 6.1 Startups to Watch 11 6.3 Industry challenges 13 7. Conclusions 14 7.1 Vertical Strengths 14 7.2 Vertical Weaknesses 14 7.3 Opportunity Cost of Capital 14 7.4 Investment Thesis Areas 15 8. References 15 2 1. Summary Aging and longevity focused startups are still in risky and exploratory phases. Most aging science has only occurred in animal models, and the few compounds that have progressed in clinical trials have failed in Phase III or are currently testing. The biology of aging is inconclusive and there are major concerns about side effects including cancer and other quality of life aspects when interventions are given. The market for aging therapeutics is unique in that the demand is invariably high, yet there has been slow adoption by VC firms and large biopharma companies to partner, invest, and develop such technologies. This may be due to a history of high profile failures and a more sober realization that the current stage of biogerontology research is not mature enough to afford the expenses of clinical trials and the current biopharma R&D lifecycle. Indeed, it seems that the field is in the early target ID stage, driven primarily by methodological scientific progress rather than high throughput screening approaches used to identify most pipeline ready compounds. Still, there has been a resurgence of interest, powered by the excitement of some high profile clinical trials, ever increasing research spending, and a philosophical shift of many to view aging as a disease rather than an inevitability. The establishment of new longevity focused funds as well as some strong recent funding rounds has encouraged founders to start ventures and commercialize their research. However, due to existing biological complexity and uncertainty, longevity remains a highly turbulent field to invest in. Ultimately, success as a startup is highly dependent on the chosen biological approach, as few if any have developed biology distanced platform approaches to discovery therapeutics. 2. Market Overview The global longevity and anti-senescence therapies market will grow from $329.8 million in 2018 to $644.4 million by 2023 with a compound annual growth rate (CAGR) of 14.3% from 2018-2023. The key growth drivers are increasing funding and progress in aging research and a wealthy aging population. Life extension is unlike any normal demand curve. There will be a tremendous growth in market opportunity because of an aging Boomer population in the U.S. and the world average lifespan also increasing annually. Using a model of future health and spending in the USA, the effect of delayed aging resulting in 2.2 years additional life expectancy would yield US $7 trillion 3 in savings over 50 years. The median wealth of US families aged 62 years or older is over US $200, 000, compared with US $100,000 and US $14,000 for middle-aged and young families, respectively. This may in part be responsible for the increase in investment in even non-traditional therapies and DTC products and services aimed at extending healthy lifespan. Still, the market for longevity therapies has been dampened by the discouragement of past failures. The most prominent example was GSK’s acquisition of Sirtris for $720 million in April 2008, whose leading compound resveratrol was hyped to have unprecedented success in pre-clinical modeling. Five years after the acquisition, GSK shut down Sirtris due to lack of efficacy. This comes with a string of more recent high visibility companies that have failed to reach investor expectations. Human Longevity Inc., founded in 2013 and previously headed by Craig Venter was once worth $1.5 billion and now has dropped to a post-valuation of $40 million. AgeX Therapeutics, founded in 2017 was once worth $68 million and IPOed in late 2018. It currently has a market cap of $28 million and is in risk of getting delisted by the NYSE. Aging has received funding from atypical investors. Historically, the field has received interest from tech innovators and billionaire investors including Peter Thiel (Unity Biotech), Jeff Bezos (Unity Biotech), Google (Calico), Adam Neumann (Life Biosciences), Jim Mellon (Juvenescence). The largest aging focused company, Samumed, is worth over $12 billion and has been funded primarily by private equity investors. Indeed, VCs have only recently viewed aging as a field worthy of investment. In particular, high impact investors including a16z and First Round have recently made investments into early stage aging startups Bioage and Spring Discovery, respectively. Among other deals, Juvenescence got a $100 million series B in August 2019. Life Biosciences got a $50 million series B in January 2019. There has recently been progress made. The first in-human trials of senolytics are ongoing. Nutraceutical and stem cell regenerative medicine trials are ongoing. Samumed is starting Phase III trials for OA. Even more promising for aging becoming an accepted indication, a Nature Aging journal was just set up and a trial for metformin was just approved using aging as a clinical endpoint, which is a tremendous step towards regulatory approval for aging focused therapies. 2.1 Pitchbook Statistics ● Quick stats (All time) ○ No. Companies: 25 ○ No. Deals: 82 ○ No. Investors: 101 ○ Largest deal: $438 M (Samumed) ● Deal count (TTM): 8 ● Most active VCs by deal count: ARCH Venture Partners, Kizoo Technology Capital, Fidelity Management, Bold Capital Partners, EcoR1 Capital, 4 Stage Average Round Size Average Post Valuation Seed $1.35 M $4.63 M A $9.68 M $37.27 M B $48 M $255.75 M C,D,E,F $37.52 M $259 M 3. Technology Overview 3.1 The Biology of Aging Most diseases accelerate with age, both in terms of incidence and severity. Cellular damage accrues over time, and as bodily repair mechanisms become worse and worse at fixing such damage, cancers, heart disease, autoimmune diseases, and others become more frequent and eventually cause death. A robust collection of in-vivo data has demonstrated that alleviating age related biological damage decreases risk of diabetes, neurodegenerative disease, and even cancer. In a hallmark review, researchers have developed 9 ‘hallmarks of aging’, which have been ​ ​ targets of therapeutic interventions. At current stages of research, there are no indications of which are may be more therapeutically promising than others. As a result, a spectrum of companies targeting different aspects of aging biology have arisen. 5 Hallmarks of Aging 1Stem Cell Activities of the 4 types of stem cells, which all help in regenerating new Exhaustion tissue cells, decline with aging. Altered Communication between cells is disrupted with age, resulting in Intercellular inflammation and tissue damage. Communication Genomic Throughout one’s life, both internal and external factors that cause Instability genetic damage start to build up in the body. This is known to accelerate aging. Telomere Telomeres – the protective “caps” located at the ends of our chromosomes Attrition (which house our genetic material) – start getting shorter each time a cell divides. Over time, this results in cells not being able to divide anymore, which can lead to disease. Epigenetic There are changes in gene expression (not changes to the DNA itself) via Alterations an individual’s life experiences or environmental factors which affect aging. Loss of With age, cellular proteins become misfolded and therefore, lose their Proteostasis homeostatic functions. A build up of these damaged proteins is observed with aging or age-related diseases. Deregulated There are metabolism-regulating pathways, whose proteins (e.g. mTOR, nutrient sensing sirtuins) are influenced by nutrient levels and also implicated in promoting aging. Mitochondrial When the mitochondria (considered the energy powerhouse responsible Dysfunction for regulating metabolism in our bodies) starts to malfunction with age. Cellular “Older” cells can’t be cleared out as fast and their build up can lead to Senescence harmful health effects. 3.2 Current Approaches Current approaches to therapies can be segmented into pharmacological treatments and cell and blood based therapies. The industry has favored the more traditional pharmacological approach, but with the applicability of stem cell research in other indications, regenerative cell based therapies have recently been of interest. Pharmacological 1 Table from CB Insights 6 On the pharmacological side, the current iteration of therapeutics have hoped to target molecules and targets that are over or under-expressed in aged individuals. These have ranged from nutraceutical supplements, repurposed diabetic medication, selective elimination of cells, and compounds to make cells live and last longer. The most promising and widely studied options have been rapamycin analogs, which modulate cell metabolism, and senolytics, which selectively eliminate senescent cells. Starting with the nutraceuticals, Elysium Health has developed Basis, a pill containing a ​ ​ powerful antioxidant and a precursor to NAD+, which has been demonstrated in lab experiments to promote cellular health and longevity. NAD+ levels decrease with age and boosting NAD+ metabolism has been shown to boost lifespan in numerous model organisms. Basis has been tested clinically to increase NAD+ levels, and Elysium has announced a follow-up study to study the effects of NAD+ levels on epigenetic aging in humans. This study was expected to be finished in May, however no updates have been posted. Basis is sold DTC as a supplement and thus has bypassed most costly FDA regulatory requirements.